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                                                                   EXHIBIT 10.12
                              THE PRINCETON REVIEW

                     EXECUTIVE COMPENSATION POLICY STATEMENT

The Princeton Review, Inc ("TPR") wants to fairly compensate its senior
management in a consistent and clear way. This document will serve as an
addendum to the employment agreements of executives selected by the Chief
Executive Officer ("CEO") or the Board of Directors (the "Board").

The issues covered are as follows: (1) Who is eligible; (2) Responsibilities and
Non-compete; (3) Term & Compensation; (4) Termination for Cause, Disability or
Death; (5) Severance Benefits and Payments; (6) Change of Control; and the
always-popular (7) Legal Stuff.

Section 1. Who is Eligible

     1.1. The CEO or the Board shall decide who will be covered under the
          Executive Compensation Policy.

     1.2. An executive will not be covered under the Executive Compensation
          Policy unless he or she has an effective employment agreement that
          provides for such participation.

Section 2. Responsibilities and Non-compete

     2.1. So long as this Agreement continues in effect, the Executive shall
          devote full business time and energies to the business affairs,
          including management and financial responsibilities, of TPR. Further,
          he or she will use his or her best efforts, skill and abilities to
          promote their interests, in accordance with guidelines, policies and
          objectives established by TPR and his or her manager.

     2.2. Any materials, writings, graphics, techniques, methods or products
          relating or reasonably applicable to TPR business, or any natural
          extension thereof, which may be developed by the Executive during his
          or her term of employment with TPR shall inure solely and fully to the
          benefit of TPR, without any additional compensation to the Executive.

          In addition, TPR will be the exclusive owner of all intellectual
          property rights (including copyrights, patents, trade secrets,
          trademarks and moral rights) in all of the Executive's works of
          authorship, inventions, and other creations, ideas, suggestions and
          contributions, either standing alone or as part of a collective work,
          that are within the scope of the Executive's employment at TPR. At
          TPR's request, the Executive agrees to sign all documents necessary to
          confirm this agreement and to secure and perfect TPR's interest in
          such rights. The Executive acknowledges that during his or her
          employment with TPR, he or she may have had otherwise prohibited
          access to trade secrets and other oral or


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          written information and materials that are confidential in nature and
          proprietary to TPR. The Executive will not, at any time, whether
          during or after the term of employment, directly or indirectly, by any
          means or devices whatsoever, copy, retain, disclose, use, or permit
          the use of or access to any confidential business information, except
          as may be required in the performance of the Executive's duties for
          TPR. Upon termination or expiration of employment with TPR, the
          Executive will immediately turn over to TPR all copies of any
          confidential business information in his or her possession or control.

     2.3. In the event of a breach or threatened breach by the Executive of any
          provision of this Agreement which would be difficult to measure in
          terms of monetary damages, including, but not limited to, the
          disclosure of confidential business information, or the unauthorized
          rendering of services to any person or firm engaged in a business
          competitive with that of TPR or its franchises as described in Section
          2.4 below, TPR shall by agreement of the parties be entitled to obtain
          a restraining order, injunction and all other appropriate equitable
          remedies in addition to other applicable remedies provided by
          applicable law. It is expressly agreed that the Executive's obligation
          to maintain the confidentiality of the business of TPR and its
          franchises, which are not matters of general public knowledge, will
          survive the termination of this Agreement.

     2.4. The Executive shall not, during the term of this Agreement or for a
          period of eighteen (18) months following the expiration or termination
          of this Agreement:

          2.4.1. engage in any capacity, in the business of providing assistance
               with respect to preparation for standardized examinations or the
               college, professional school, or graduate school admissions
               process, without the advance written consent of TPR, or

          2.4.2. solicit the services of any employee of TPR or any of its
               franchises (or any individual employed by TPR or any of its
               franchises within the then most recent 12 months) or take any
               action that results, or might reasonably result, in any employee
               ceasing to perform services for TPR or any of its franchises and
               commencing to perform services for the Executive or any person or
               entity associated with the Executive. If the Executive breaches
               this Section 2.4, he or she will immediately forfeit as of the
               time of such breach the right to receive any severance payments
               or benefits under this Agreement and forfeit the gain from any
               stock options exercised following a termination of employment. In
               addition, TPR will be entitled to require that the Executive
               repay to TPR the value of any such payments or benefits
               previously paid to the Executive and to pursue any additional
               remedies at law or equity, including, without limitation, those
               contemplated by Section 2.3 above.

     2.5. If any provision of this Section 2 is found to be void or
          unenforceable, in whole or in part, then the remainder of the
          provisions of this Section 2 will remain in full force and effect and
          in no way be affected or impaired, and the provision so found to be
          void or unenforceable will be deemed modified in amount, duration,
          scope or otherwise to the minimum extent necessary such that such
          provision


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          shall not be void or unenforceable and, as so modified, will remain in
          full force and effect.

Section 3. Term & Compensation:

     3.1. The Agreement has an initial one-year term which will automatically be
          extended for additional two-year periods upon the completion of the
          initial one-year term or any two-year extension period thereafter
          until (i) the Executive voluntarily terminates employment or (ii) TPR
          gives contrary written notice to the Executive at least 60 days prior
          to the completion of the initial one-year term or any two-year
          extension period thereafter.

     3.2. Base annual salary is payable in 26 equal bi-weekly installments.

     3.3. A health insurance plan comparable to the best plan being provided on
          a current basis to management executives of TPR or other TPR
          employees.

     3.4. Other benefits such as 401(k), cafeteria plan, educational
          reimbursement and such others as may be provided to other management
          personnel of TPR or other TPR employees.

     3.5. Three weeks of paid vacation.

Section 4. Termination for Cause, Disability or Death:

     4.1. TPR may terminate the Executive's employment for Cause.

     4.2. TPR may terminate the Executive's employment due to his or her
          "Disability." For purposes of this Agreement, the Disability of the
          Executive shall mean that the Executive shall fail because of illness
          or incapacity to perform for 90 successive days, or for shorter
          periods aggregating 90 days or more in any consecutive 12-month period
          (the "Periods of Disability"), the duties of employment. In no event
          will the Executive's absence from work on an approved maternity or
          paternity leave be counted as a Period of Disability.

     4.3. This Agreement shall terminate immediately upon the Executive's death.

     4.4. If either party terminates this Agreement, neither shall publicly
          disclose the reason or basis for the termination, except if the reason
          or basis was a conviction of a crime of the kind described in Section
          4.1 above.

Section 5. Severance Payments and Benefits:

     5.1. If the Executive's employment terminates for any reason during the
          term of the Agreement, the Executive will be entitled to receive his
          or her salary through the date of termination (and a cash payment for
          vacation accrued to that date).

     5.2. If TPR terminates the Executive's employment due to his or her
          Disability, then, in addition to the payments provided under Section
          5.1 above (which will include the salary accrued by the Executive
          during the Period(s) of Disability), the Executive will also continue
          to receive base salary for a period of six months following the date
          of termination, minus any other Disability benefits provided


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          by TPR to the Executive during this period. Payment under this Section
          5.2 will, however, immediately cease upon the Executive's return to
          employment with TPR or any other employer.

     5.3. If TPR terminates the Executive's employment without Cause, or if the
          Executive terminates employment after being Reassigned, then, in
          addition to the payments provided under Section 5.1 above, TPR will
          pay the Executive his or her annual base salary for an additional six
          months following termination. In addition, the Executive will be
          entitled to reimbursement of COBRA payments to maintain medical and
          dental insurance for a number of weeks equal to twice the number of
          years he or she was employed full-time by TPR.

     5.4. If TPR does not renew the Agreement under Section 3.1 above, then, in
          addition to the payments provided under Section 5.1 above, TPR will
          give the Executive a lump-sum payment equal to his or her weekly
          salary multiplied by twice the number of years he or she was employed
          full-time by TPR. This payment will not be due if TPR is in the
          process of Terminating for Cause at the time of renewal.

     5.5. Any severance payments or benefits provided under this Section 5 shall
          be in consideration of the non-competition provisions of Section 2.4
          above.

Section 6. Change in Control:

     6.1. TPR shall retain full and unlimited discretion to add to or to dispose
          of TPR. However, if there is a Change in Control during the term of
          the Agreement, the Executive will be entitled to immediate vesting and
          settlement of all deferred stock and stock options then held by the
          Executive under the relevant plans, and of all other stock-based
          awards granted to the Executive under any stock-based incentive plan
          of TPR.

Section 7. Legal Stuff:

     7.1. Except for the right of TPR to seek equitable relief under the
          circumstances provided by Section 2 hereof, any controversy, dispute
          or claim arising under or relating to the provisions of this
          Agreement, or the breach thereof, shall be determined by arbitration
          in the City of New York in accordance with the Commercial Arbitration
          Rules of the American Arbitration Association then in effect. The
          decision and award in such arbitration proceeding shall be binding and
          final on the parties, and judgment upon the award rendered by the
          arbitrator(s) may be entered in any court having jurisdiction thereof.

     7.2. If any provision of the Agreement shall be found to be invalid or
          unenforceable, that provision only shall be deemed to be deleted, or
          revised to validly express the intention of the parties, and the
          remainder of the Agreement, by intention of the parties, shall remain
          valid and enforceable to the fullest extent permitted by law.


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     7.3. The Agreement is personal to the Executive and may not be assigned by
          him or her. TPR may assign the Agreement to any successor, or to any
          party or corporation that may succeed to the business of TPR or of
          such successor by sale of assets, merger, or consolidation or
          otherwise, provided the assignee assumes the responsibilities and
          obligations of TPR under the Agreement.

     7.4. The Agreement constitutes and contains the entire agreement and
          understanding of the parties with respect to the subject matter
          hereof. A modification of this Agreement will be binding only if
          agreed to in writing by the party sought to be bound or obligated.

     7.5. The Agreement shall be interpreted under the laws of the State of New
          York.

     7.6. The Agreement may be executed in any number of identical counterparts,
          and each counterpart shall be deemed a duplicate original hereof.

     7.7. The CEO (except with respect to the CEO's employment agreement, in
          which case the Board) shall administer this Policy and shall have
          exclusive authority and discretion to interpret and construe the terms
          hereof and to determine the Executive's eligibility for payments and
          benefits hereunder. Any such determination will be final and binding
          on the Executive unless arbitrary and capricious or made in bad faith.

     7.8. Any payments due to the Executive hereunder will be reduced by all
          required withholding and other taxes.

     7.9. Many definitions and terms used here can be found in The Princeton
          Review Glossary. Any of the terms may be superseded by the specific
          employment agreement, which along with this addendum, are referred to
          herein as the "Agreement". However, the terms herein supercede those
          of the Stock Option Grant or Stock Incentive Program.


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